LONDON — These times are strange indeed.

Who would have thought we would see Infineon being offered a 150 million euro ($200 million) loan for a struggling subsidiary in which it has a 77.5 percent stake? And what is more who would have thought we would see Infineon reject that substantial bail-out plan because the conditions, at almost no interest payable, are too onerous?

But this is the case. And Peter Bauer, Infineon's CEO, has made it clear in a statement that he is not best pleased that the German State of Saxony has ignored what it has been told that Infineon can afford, and what Infineon needs to achieve in a bail-out. Politicians do that sometimes and then try and use public opinion and outcry over jobs to force the issue, or at least to present themselves as the good guys.

Two key aspects of Infineon's rejection are the facts that, while the State of Saxony is prepared to make the 150 million euro loan on commercial terms, Infineon must put up a matching sum unconditionally. In theory Saxony could get Qimonda to pay off the Saxony loan with the Infineon money and be free and clear of any obligation. So how much of state bail-out would that be?

Of course, that is not the intention but the requirement for matching money would cost Infineon dear and would effectively buy it nothing. Infineon wants Qimonda, and 3,200 jobs in Dresden off its books. Right now it Bauer is showing that simply closing the Dresden manufacturing base down at the loss of all those jobs is more advantageous to it than the Saxony plan.

A more attractive offer would be for the State of Saxony to invest 150 million euros in Qimonda, taking a 28 percent stake and thereby relieving Infineon of its majority shareholding while, at the same time, letting Infineon loan a similar amount to Qimonda, which Infineon might, emphasizing might, get back one day.

Meanwhile, in the background and almost unmentioned, is the question of whether such bail-outs for DRAM makers are legal or not given governments' World Trade Organization obligations. This remains as questionable in Germany as it is South Korea or in Taiwan.

But all the negotiations of high finance beg the most important question for Dresden; should Qimonda be in the DRAM business as a manufacturer at all? And if the answer is "no" maybe the bail-out money would be better spent supporting the creation of numerous fabless startups on the fab campus.